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 Where is Ross Perot when we need him? Every
time we drive by a gas station lately, we hear this giant sucking sound. Every
time we read the Business section or check the
price of a barrel of oil, we hear the giant sucking sound. Especially, every time we open
our wallet to pay for a tank of gas, we hear the giant sucking sound.
There have been an abundance of articles lately on the
gripping question in everyone’s mind – "Why
Are Gas Prices So High?"
Wrong question. As the Dowbrigade has been insisting for some time
now, the key question to understanding the current radical redirection
of the economy is "Where
is all that money going?"
"Follow the Money"
is the first rule of any investigation of complex professional
crime.
In the current case, the money trail is wide, deep and
well-illuminated. Conventional analyses we have read have concentrated
on complex technical explanations of the cause of the increases,
all featuring some combination of growing demand in China, the effects
of Hurricane
Katrina,
political
and mechanical
problems in other producing regions and aging transport and refining
infrastructure in the US.
Again and again, "simple
market factors" are invoked, as if "Supply" and "Demand" were mythic
supernatural entities whose dictates must be obeyed lest divine destruction
rain down from the firmament. Macro-economic analysis is good at explaining
the mechanisms that functioned to raise the price of oil, but not so
strong in illuminating where the
money ends
up.
The Downrigade prefers to run our economic analyses
from the ultimate micro-economic perspective – our individual, week-to-week
financial reality. Direct Deposit to ATM to wallet to the acquisition
of goods and services – the true American pastime.
According to our admittedly
less-than-scientific calculations, we are spending an extra $30
a week on gasoline, compared to a couple of months ago. Over a year,
that comes to $1,560. If we make the somewhat dubious but still useful
assumption that everyone in the country uses as much gas as the Dowbrigade,
that comes to $US 486 BILLION EXTRA dollars, on top of the record
profits they were ALREADY reporting before the latest runup.
And this without figuring in the petroleum consumed
by businesses, to generate electricity, by the government, by the petrochemical
industries, by the airlines, etc.
As recently as a year ago, analysts laughed at those
who proposed that a $1 tax on a gallon of gas could eliminate the national
debt in one Presidential term. Americans would never stand for
it, they said. It would throw the economy into a recession, they said.
So where IS the money going?
A lot of it going to foreign national oil companies;
thinly disguised corporate fronts for the political establishments of
oil-rich nations – Aramco in
Saudi Arabia, Pemex in
Mexico, Yukos in Russia, now that it’s been absorbed by Putin.
Some of that money keeps Hugo Chavez in power by allowing him,
unlike almost every other Latin American government, to actually
fund and run programs to improve the lives of the poor people in his
country, which gets him re-elected in real elections, like it or not.
Some of that money goes to allow a series of corrupt
and incompetent governments in Ecuador, an original member of
OPEC, to stay in power, if only for long enough to loot a few million
apiece and get out of Dodge. A chunk goes to our good buddies in Saudi
Arabia to fund Madrastras and shady Muslim charities which, in a grotesque
irony, are being used as conduits to killing Americans.
But most of the money is going, directly and indirectly,
to the giant oil companies and their strategic allies. These companies
already dominated the global economy, even before the current "energy
crisis". Fortune
Magazine reports that last year, 10 of the 12 biggest companies in
the world were oil or car companies.
Some of this huge windfall is being disguised, hidden,
sunk into new exploration and long-term contracts, siphoned into less
profitable associated industries or transferred to foreign profit-havens,
but much
of it cannot
be disguised and as a result most of these companies are reporting record
profits every quarter now.
But is the explosion of prices in the oil industry the
simple and accidental result of market factors, or has the situation
been somehow manipulated to shoot the price of oil through the roof?
Some
of the truly
paranoid
have speculated on the existence of some sort of electromagnetic storm
magnet drawing Katrina directly down on the Gulf oil infrastructure,
but one
needn’t hypothesize some modern Dr. No or Dr. Evil directing the
hurricanes from his secret subterranean hideout in order to support
a conspiracy.
By neglecting infrastructure and taking advantage of
the geopolitical situation in a variety of countries, the industry could
easily have created a situation in which it was inevitable that something would
cause a shortage of supply, and a corresponding increase in price. Then
all they had to do was sit back and wait for nature and market mechanics
to do the dirty work.
The emerging global economy is a huge money machine,
and the strongest current economic centers of gravity are sure to try
to emulate the oil companies" s unprecedented redirection of capital.
Of course, it helps to get one of your own elected to the
White
House.
But not necessary: the long-standing "military-industrial complex" has
morphed into the "Defense Industries", and by insinuating themselves
into halls
of
power and maneuvering the country into a perpetual state of war, have
guaranteed their continuing prosperity well into the new century.
The
telecommunications industry is busy as we speak figuring out the optimal
access and information fee structure for maximizing profits from tomorrow’s
always on, all-embracing ubiquitous and unavoidable Internet. In
the future a person won’t exist without an internet presence, and they
are eagerly
anticipating
getting
a payment
every month, from every man, woman and child in the country, and eventually,
the world.
Expect other players to make their moves soon. We wouldn’t
be surprised, for example, to see the untraceable emergence of an extremely
unpleasant but non-fatal disease, which can only be kept under control
by regular administrations of an extremely expensive patented medicine
available from only one pharmaceutical company…
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BERLIN (Reuters) – A German inventor
90% of the problems in the world are
